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Day: August 3, 2023

Leading Careers for Finance Aspirants in 2023

Posted on by Imarticus Learning

Money makes the world move, and finance is at the heart of understanding it. Whether planning an individual’s food budget for the month, handling the investments of a large MNC, or proposing a budget for a country of over a billion people, you need to understand how finance work. 

From small questions to big ones, finance will give you the skills to understand them all. No wonder it is one of the most sought-after degrees in the world today. Out of the 3.82 lakhs net increase in jobs in the financial year 2022, finance (along with IT and banking) was one of the three sectors that contributed to the 93 percent net increase. According to the Federation of Indian Chambers of Commerce and Industry, the domestic financial sector is expected to generate another 50 lakh jobs in the next ten years. Moreover, the salary in the financial services sector is predicted to increase by 9-12%. 

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To meet the ever-increasing demand among aspirants and professionals looking to upskill, some premier institutes in India are offering financial services courses, like IIM Lucknow online certificate courses for finance. 

If you want to ride the wave of growth in the financial sector, here is your chance! Take a look at some of the leading careers for finance aspirants in 2023.

Leading Careers for Finance Aspirants

Finance professionals are an essential part of any organisation, no matter their size. The job prospects are immense, and the roles pay incredibly well. If you want to secure your professional growth in the financial sector, these are the careers that you can look into.

Financial Advisor

A financial advisor is your one-stop shop for all finance-related advice. These professionals help their clients make informed financial decisions, build an investment portfolio, make retirement plans, provide insurance coverage advice, strategise tax planning, manage debt, and much more! They help people get their financial affairs in order based on their goals. A financial advisor can expect to earn an average base salary of INR 4,26,380. 

Financial Analyst

One of the most sought-after positions in the financial services sector is of a financial analyst. A financial analyst is responsible for assessing and analysing the financial data of an organisation to help it steer business decisions through recommendations. They evaluate the fiscal health of organisations based on which they advise the stakeholders and help them draw up a plan of action. The average salary of a financial analyst in India is INR 4,81,684, subject to various factors. 

Investment Banker

Investment bankers are at the top of the chain in the financial services sector. One of the most highly-paid careers, with an average salary of INR 8,94,943, it is also an extremely demanding and competitive career option. An investment banker is a professional who provides financial services to corporates, retail and institutional investors, and governments to raise capital, invest, manage debt, and arrange mergers and acquisitions. 

Financial Software Developer

If you want to combine your love for technology with finance, a career as a financial software developer is just what you need! As the world becomes even more technologically advanced, the finance industry is increasingly relying on technology to foster its growth. Financial software developers provide their technical expertise to the finance industry by developing, maintaining and upgrading software that provides solutions and meets its transforming needs and requirements. The boom in the Fintech industry is a testament to the collaboration between the two sectors. 

Financial Risk Manager

Whether it is a recession, inflation, pandemic, natural disaster, or war, the financial sector has to weather several storms. Financial risks constantly threaten the economy and market. A financial risk manager protects an organisation from internal and external risks to ensure its financial stability and growth. It is a professional designation issued by the Global Association of Risk Professionals (GARP) through their FRM Certification. They identify, analyse, and mitigate threats to the organisation through strategic risk management.  

Actuary

If mathematics is your field of expertise, then the role of an actuary will be right up your alley! An actuary uses advanced mathematical and statistical techniques and models to measure and manage the risks and uncertainties of future events. They analyse financial risks resulting from future scenarios and assess their impact based on historical trends and future projections. Actuaries are essential for sectors like insurance, social security, annuities, pensions, health benefits, government schemes, investments, and business management. The average salary of an actuary in India is INR 10,13,674.

Treasury Manager

A treasury manager is the gatekeeper of an organisation’s financial resources. They are responsible for overseeing the management of corporate finances, including cash flows, liquidity, financial records, investment management and risk management. You can expect to earn INR 12,31,513 per annum for helping an organisation achieve its financial goals and safeguarding its financial health. 

Hedge Fund Manager

For those seeking a fast-paced, intensive career track with high rewards, being a hedge fund manager is the career for you. Hedge fund managers are responsible for managing a hedge fund (a pooled investment fund) and making investment decisions that are high-risk and high-reward. They constantly seek ways to outdo the market returns by reading market indicators and the general economic climate. The world’s richest hedge fund managers have a net worth in the billions!

Chief Compliance Officer (CCO)

A member of the C-suite (the coveted club of ‘Chiefs’ leading an organisation), the Chief Compliance Officer (CCO) oversees and ensures that an organisation adheres to the laws and regulations of the state. They protect the company by ensuring it toes the lines of governmental regulations that affect its operations. The average salary of a CCO in India is a whopping INR 32,22,193!

Chief Financial Officer (CFO)

The head honcho of the financial department in any organisation, the Chief Financial Officer (CFO), is the zenith of success for any finance professional. This C-suite executive works closely with the CEO and other C-suite members to strategically lead the company’s financial growth. The CFO is responsible for overseeing the entire financial management of an organisation, liaison with external financiers, assessing and evaluating the financial health of the company, managing financial risks, and much more! A CFO in India can earn a mind-boggling average salary of INR 35,71,771!

Conclusion

The ever-changing and ever-evolving financial sector is continuously expanding. One thing that has remained constant throughout its dynamic growth is the demand for financial services. Finance professionals have the flexibility to move across industries equipped with their expertise. But, if you have higher aspirations and want to be the next CFO of a Fortune 500 company, you have to continuously learn and grow.

This is where Imarticus’ Advanced Management Programme In Financial Services And Capital Markets, offered by IIM Lucknow, can be your guiding hand.

Among the top IIM finance course, this program will help you develop a comprehensive knowledge of digital banking, capital markets, risk management and fintech domains. Connect with the brightest minds in the world as you become part of the illustrious IIM Lucknow alumni.

Automation in HR: Top HR Softwares in India

Posted on by Imarticus Learning

From hiring and onboarding to ensuring quality employee experience, managing all of these HR management tasks has always been challenging. To deal with these complexities, many businesses leverage the power of HR software to streamline all their operations and enhance the overall efficiency of the organisation. 

On that note, let us explore the benefits of using HR software as well as the top HR software solutions used by various organisations across India. 

Benefits Of Using HR Software

Before delving into the intricacies of the various HR software available, let’s first look at the benefits of using them.

Real-Time Analytics And Reporting 

HR software provides valuable insights through real-time analytics and reporting. Human resource professionals can monitor key performance indicators, or KPIs, study workforce trends, and make data-driven decisions to optimise strategy with the aid of HR software. 

Additionally, HR experts may utilise the data to plan and implement successful programmes to raise overall productivity levels across the board for both employees and the company, promoting a positive work environment for all. 

Significant Reduction In Manual Errors

Organisations can greatly lower the likelihood of human error by deploying the necessary HR software. Saving both time and money is possible as a result. It is now possible, for instance, to combine most modern HR software with payroll systems, which makes it much easier to manage payroll with much greater accuracy and efficiency.

Enhanced Employee Engagement

Most HR software and tools are equipped with various features, such as performance feedback tools and employee self-service portals, among others. With the help of the same, employees can quite easily access important information, request leave, and provide valuable feedback in a much more convenient and efficient manner, thus enhancing the overall engagement rate.

Apart from all these above-mentioned benefits, there are also several other advantages that you can enjoy by implementing HR software into your business. Such include compliance and legal adherence, seamless onboarding, and better performance management, among others.

List Of Best HR Software In India

According to a recent survey, as much as 74% of organisations have agreed that they wish to increase their expenditure related to HR tech in order to meet the pressing talent needs. On that note, here is a comprehensive list detailing some of the best HR software applications currently available.

Freshteam

When it comes to workforce management, nothing can beat Freshteam at its game. Packed with robust features, Freshteam is a one-stop destination for fulfilling all your HR duties. With the help of this platform, you can attract, hire, and onboard employees in a seamless and hassle-free manner. 

In addition, Freshteam allows for managing offboarding tasks, accessing employee information, and recording time and attendance. All these features make this platform a must-have for all types of businesses. Freshteam subscription starts from $50 per month, which can accommodate up to 50 active users. 

Zing HR

Moving on, Zing HR is a popular cloud-based human resource management software (HRMS) in India. It offers a comprehensive suite of HR and payroll tools that help streamline HR operations, enhance employee engagement and improve the efficiency of an organisation. Some of the key features included in this application are automated payroll processing, time and attendance tracking tools, and detailed analytics and reporting abilities. 

Bamboo HR

Some of the diverse features that set Bamboo HR apart from its other competitors are its intuitive design and easy-to-use specifications. It is an all-in-one HR software specifically useful for small and medium-sized businesses. It covers some key HR functions such as performance management, applicant tracking, payroll processing, and employee records management. 

Kredily

Established in the year 2017, Kredily is a comprehensive cloud-based HR and payroll software platform that is specifically designed to automate all HR operations for businesses in India. One of the many features offered by this platform includes its ATS, an applicant tracking system that enables HR professionals to streamline all their recruitment processes, starting from sourcing to candidate onboarding. With the help of this feature, recruiters can also manage job postings, track applications, and conduct interviews efficiently, all in one platform. What’s more? You can avail all of these HRM and payroll solutions free of cost! 

Beehive HRMS

Beehive HRMS is another fantastic platform used by many businesses pan India to streamline their HR processes. This cloud-based HR software makes it much easier for the HR team to manage their workforce easily and hassle-free. From recruitment to payroll management, you can streamline all these tasks with Beehive HRMS. Some of the many features that make this platform an invaluable tool for most business enterprises are timesheet management, travel and expense management, offboarding, and helpdesk. 

Conclusion

HR software has proved to be instrumental in empowering HR professionals to work more efficiently, improve employee experience, and make data-based decisions. The various automation capabilities and data analytics provided by these platforms give organisations that much-needed competitive edge and enable them to attract, develop and retain top talent.

If you wish to know more about such HR software or simply want to unlock your full potential in the dynamic field of HR, do not forget to check out the People Leadership and Strategic HR Management program, brought to you by IIM Lucknow, in collaboration with Imarticus Learning. This 11 months strategic HR training course will equip you with all the relevant skills and knowledge required to excel in this field. With this people leadership training program, you will also explore innumerable benefits, such as masterclass sessions, hands-on experience in managing teams, and valuable insights into management challenges. 

So what are you waiting for? 

Enrol in our comprehensive people leadership program today and gain the knowledge and take your career to the next level!

Accounting for Intangible Assets: Recognition, Measurement, and Impairment

Posted on by Imarticus Learning

International Accounting Standards 38 (IAS) directs the accounting procedure and prerequisites for intangible assets. Intangible assets are not physical substances; hence unidentifiable and cannot be recognised. Assessing the value of intangible assets in monetary terms is tricky and involves specific recognition and measurement processes. 

The intangible assets that attain the identification criteria are first measured at cost. Then they are amortised and measured systematically to calculate the value of the asset’s remaining useful life. Computer services, company goodwill, trademarks, and patented technology are some examples of intangible assets. Read about the recognition criteria, measurement procedure, and other factors regarding intangible assets covered in an ACCA course online.

Recognition Criteria

According to IAS 38, only the intangible assets associated with an entity will be recognised. Such an asset can be either purchased or self-created, but it must meet specific requirements, which are:

  • There must be a high probability that any economic benefit resulting from that asset will go in favour of the entity.
  • The value or cost of the asset must be ascertained reliably.

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Recognising intangible assets requires fulfilling various other criteria and pursuing an ACCA course online can help one understand how to deal with them effectively. If an intangible item does not meet both the recognition criteria, it will fall out of the assets category, and the expenditure incurred on such an item will be recorded as an expense in the accounts books.

Measurement of Intangible Assets

As stated in IAS 38, intangible assets are initially measured at cost. The value of intangible assets will always be measured and recorded in the books of accounts at the cost the entity has acquired it. 

Measurement post acquisition

Another way of measuring intangible assets is in case of acquisition of the same. Understanding the modes of calculating and measuring intangible assets is essential if you are preparing for the ACCA exam. Measurement of intangible assets in case of acquisition can be done in two ways enumerated as follows:

  • Cost model: In this model, once an intangible asset is developed or brought at cost and has been recognised, it should be calculated at cost deducting the total impairment losses and amortisation.
  • Revaluation model: Another mode of measuring intangible asset value is the revaluation model, where the revalued amount is based on fair value. If any reference to any active market can ascertain the fair value of the asset, the value of the intangible asset will be measured at fair value minus the accumulated amortisation and impairment losses. However, the existence of active markets in the case of intangible assets is rare. 

As per the revaluation model, revaluation rises are recorded in other comprehensive income. Revaluation surplus comes under the head of equity only if not recorded in the profit and loss statement. However, the revalued intangible asset has a limited life span and hence is likely to be amortised.

Measurement of Intangible Assets Based on Useful Life

Intangible assets can be classified into two broad categories as mentioned below:

  • Infinite life: Intangible assets are said to have infinite life when there is no foreseeable limit to the time or period to which that asset can yield cash inflows for the entity.
  • Finite life: Intangible assets have a finite life when there is a foreseeable limit to the period up to which it can generate cash inflows and benefit an entity.

Both these categories follow different methods of value measurement of the assets. 

Measurement of intangible assets with an indefinite useful life

While measuring the value of an intangible asset with an indefinite useful life, the asset’s amortisation should not occur. The value and indefinite life of the asset should be revised in each accounting period to check whether it lives up to the circumstances and events of indefinite useful life. If not, the shift from an indefinite to a finite useful life evaluation should be recorded as a modification in an accounting estimate.

Additionally, the intangible asset should also go through an assessment to check for empowerment according to the IAS standards 38. 

Measurement of intangible assets with a finite useful life

An intangible asset with finite useful life needs to be amortised, and the value of the asset should be assessed by deducting the residual value of the asset from the cost of the same. This process should follow a systematic way to evaluate the cost over a period of time correctly. 

However, the process of amortisation of the asset should depict the pattern of benefits, based on the fair value of the intangible asset. In case the pattern cannot be adequately evaluated, the amortisation process should be done according to the straight-line method. Generally, the cost of amortisation is recorded in the profit and loss statement unless otherwise required to be recorded as an expense as regards another asset. The period of amortisation needs to be reviewed at least once a year.

The amortisation standard involves a rebuttable presumption that the revenue-based amortisation process of an intangible asset is improper. Still, there are a few instances when this presumption can be proven wrong, such as:

  • When the intangible asset is recognised as a source of revenue.
  • When it can be shown that revenue and consumption of economic benefits of the intangible asset are extremely correlated.

Conclusion

We have moved beyond calculating and assessing the value of tangible assets, as the role and significance of intangible assets in an entity has grown manifold. Understanding the accounting standards for intangible assets has become extremely important for the upcoming chartered accountants. However, deriving the right value of an intangible asset is much more complex and challenging when compared to tangible assets.

If you want to become a leading chartered accountant focused on making an impact, then the Association of Chartered Certified Accountants, UK Programme by Imarticus can be a great step towards achieving a successful career. Enrol to pursue an ACCA course online and learn all you need about financial accounting, management accounting and business technology with a back-to-basics approach smoothening the transition for working professionals.

Motivating Your Team For Maximum Efficiency: A Guide and Best Practices

Posted on by Imarticus Learning

Motivation is one major element that drives our lives. Without this, it’s difficult to sustain in this ever-evolving competitive world. It empowers us to achieve our goals and increases our dedication and enthusiasm. 

Especially today, when most of the population suffers from anxiety and depression, motivation is a reliable solution.

There’s a rising demand for professional leaders with the necessary skills to drive the workforce towards improved productivity and efficiency. 

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The practical approach of leading a team and drawing maximum efficiency from them is essential to become an influential leader. To achieve this, one must know the best practices to put into practice. The journey of motivating employees and transforming them into professionals driven by a sense of purpose is undoubtedly tricky but attainable. Here’s a brief roadmap to guide you in the process. 

Psychology Behind Team Motivation

Before jumping into the different practices leaders can follow to motivate their team members, they must understand the psychology behind them. 

There are broadly two types of motivation for employees — extrinsic and intrinsic. Extrinsic motivation includes raises in pay scale and in-office perks, whereas intrinsic motivation is more personal to the team members. In this case, encouragement comes from within when a certain task is accomplished and well appreciated. 

Extrinsic motivations are temporary; leaders should always focus on motivating their team members with intrinsic values. However, a carefully structured blend of the two can work wonders. 

Five Best Practices to Motivate Your Team 

In a professional setting, employees collaborate to achieve the given objective efficiently. However, leaders can also accelerate this process using motivational techniques and strategies. Here are some practices that can help bring desirable results if used properly.

Communication

A clear communication channel in a team is one of the essential factors in making things work for the best. It engages team members more, and regular updates, feedback, and criticisms keep them informed and motivated. 

Another element that must be communicated is the vision of the organisation and the expectations of each employee. This deep understanding of the impact of their work will boost their motivation further. 

Empowering team members

Apart from building strong communication among team members, empowering them by giving them a sense of ownership of the work is important. This autonomy makes them feel more included in the organisation with responsibilities they are accountable for. However, this practice shouldn’t be exercised at the cost of teamwork, as it boosts productivity. A balance between the two is imperative. 

Positive work environment

The nature of the work environment makes a huge difference in the performance of a professional. It is often overlooked, but a positive change can deliver unimaginable output. Thus, team leaders should give due importance to the work environment of their team members and make it more inclusive, comfortable, and energetic for them. 

Professional development opportunities

In today’s time, professionals are always looking to upskill and enhance their body of work. However, they cannot pursue them actively due to their professional responsibilities and lack of time. Thus, when the organisation takes a step toward motivating and supporting its employees in their dreams, it makes them feel more included and adds to the company’s growth. An environment of continuous learning is an excellent factor contributing to both organisation and employee development. 

Rewarding achievements

Acknowledgement and appreciation are two basic elements most leaders forget to use. Acknowledging the contributions of team members and appreciating their accomplishments encourages them to put their heart and soul into their work. Furthermore, they can be rewarded for their hard work and dedication with bonuses, souvenirs or other material or abstract forms of encouragement. 

Build relationship

Being a part of an organisation and working daily together naturally builds a relationship among the employees. However, this is a professional equation, and team leaders should aim to create rapport and trust among their team members. This transparent and authentic relationship lays the foundation for mutual respect. This enables team members to be much more open to suggestions and feedback. 

Ensuring work-life balance

One major concern that almost every professional has nowadays is balancing their professional and personal lives. This has become a matter of concern with the work overload disturbing their lives. Therefore, in such cases, leaders should ensure a healthy work-life balance for their team members by offering flexible schedules, encouraging breaks, and providing work-from-home opportunities. 

One-on-one discussions

Leading a team is also about managing the members individually and giving importance to each of them. One can become an influential leader by caring about each team member. To do this, leaders can arrange one-on-one discussions with every team member, breaking the ice between the two and learning about their goals and perspectives. This simple step by the team leaders not only empowers the employees to put their best foot forward but also lets them open up to the leaders about any issues they face. 

Conclusion

Managing a team is one thing, but motivating them throughout for maximum efficiency is another. Leaders often forget this crucial element of leadership while focusing on the final output. Without the constant motivation and drive to accomplish end goals, employees might realise the target but always lack efficiency. 

Hence, team leaders, managers and others in leadership roles must know the psychology behind motivating their team members and the best practices. Although there’s no single way to encourage your team, leaders can see positive changes starting with the practices mentioned above. 

For more in-depth knowledge, enrol in the IIM Lucknow Leadership Programme offered by Imarticus, where industry leaders will guide you in becoming one of them. This new-age global senior leadership programme will build you into the leader you have always dreamed of.

To learn more about these leadership courses from IIM, visit Imarticus Learning today.

6 Key Steps to Design a Successful Marketing Strategy

Posted on by Imarticus Learning

Crafting an outstanding marketing plan is comparable to setting out on a journey to explore uncharted territory in the wide and constantly changing world of business. Prepare to raise your creative sails and set a course for success as we begin this thrilling trip.

The six essential phases that will mold your marketing plan into a potent and successful force will be revealed as we explore the waters of marketing knowledge in this post. Our insights will serve as your dependable compass whether you’re an experienced marketing captain looking to fine-tune your strategy or a burgeoning businessperson wanting to create waves in your sector.

Consider your company as a ship sailing over an endless ocean of possibilities. A thoughtful marketing plan is crucial for navigating this sea of opportunities; it acts as the wind in your sails and the stars as your navigational aid. 

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So prepare to immerse yourself in marketing alchemy and weigh anchor. Together, we’ll discover the secret to transforming undeveloped ideas into profitable prospects and discover how to use creativity to make a lasting impression on your target market.

A marketing strategy refers to an organization’s promotional efforts to distribute resources over various platforms and channels to boost sales and establish a long-lasting competitive edge in the relevant market.

In the 1970s and 1980s, strategic marketing became a subfield of strategic management. Marketing strategy emphasizes the function of marketing as a conduit between a company and its clients, combining resources and competencies inside a company to gain a competitive edge.

What are the key steps to craft a remarkable marketing strategy?

A marketing strategy is a tactical plan that aids a company’s financial goal-setting and achievement.

 Adhering to the procedure enables a corporation to:

  • Identify the market demand that it satisfies.
  • Set targets and goals for your sales, marketing, and income.
  • Determine the target market’s desires and demands by identifying them.
  • Create goods and services to fulfill such demands and requirements.
  • Apply the marketing strategies.
  • Inspect the marketing strategy and make required adjustments.

Best practices to develop a successful marketing approach

Effective marketing tactics are business and marketing strategies and methods used to advertise goods or services, interact with target markets, and meet marketing objectives. These strategies intend to draw new clients, raise brand recognition, and increase revenue.

Step 1: Understanding Your Audience – A Gateway to Connection

Every successful marketing plan starts with a thorough grasp of your target market. Investigate and analyze your target population’s preferences, problems, and goals. This priceless information will serve as your compass and direct you toward developing a closer relationship with them.

Step 2: Setting Clear and Measurable Goals – The North Star of Success

Every trip becomes useful with a destination in mind. Similarly, it’s critical to have specific, quantifiable goals in marketing. These goals will guide your efforts and act as a standard to judge your progress. Keep in mind that setting attainable goals will inspire your staff to succeed.

Step 3: Creating an Original Value Proposition – Let Your Magic Shine

What makes you stand out in a sea of rivals? Your brand stands out from competitors thanks to your unique value proposition (UVP). Be bold, inventive, and imaginative when demonstrating why your product or service is ideal for your target audience. A compelling UVP will win over your clients’ hearts and minds, turning them into devoted brand champions.

Step 4: Embracing Multi-Channel Marketing – The Symphony of Communication

The days of depending just on one marketing medium are long gone. Utilize multi-channel marketing to your advantage and create a communication symphony that reaches your audience wherever they are. Make sure your message is consistent across all platforms, from social media to email marketing, and tailor it to each one’s particular characteristics.

Step 5: Producing Entertaining Content – A Resonant Narrative

The driving force behind your marketing plan and the means through which your brand’s narrative is conveyed is content. Your content should appeal to your audience’s feelings and goals through interesting blog articles, intriguing films, or eye-catching infographics. Keep in mind that the finest stories are the ones that touch and move you.

Step 6: The Art of Perpetual Improvement – Analyzing, Adapting, and Evolving

An effective marketing plan is never static; it is a dynamic entity that changes as your target audience and market conditions do. Analyze the effectiveness of your efforts frequently, collect information, and be flexible in your approach. Accept failure as a necessary step on the road to success, and use the knowledge you receive to improve your action plan constantly.

Innovative marketing strategies deviate from the norm and employ fresh methods for interacting with and reaching consumers. They are frequently original, surprising, and occasionally even disruptive. But they are all made to accomplish a certain marketing objective, like raising brand recognition, generating leads, or boosting sales.

The Final Words

With the understanding of the six essential stages to creating an outstanding marketing strategy, you are the conductor of the marketing symphony. Remember that your audience is the heartbeat that keeps your rhythm alive as you navigate the fascinating world of creativity and innovation.

You will establish a harmonic relationship with your clients that resonates deeply within their souls by comprehending them, connecting with them, and adding a dash of magic to your distinctive value package.

Embrace the diversity of the multi-channel world because it provides a blank canvas on which to paint the captivating tale of your business. Each platform should serve as a stage for your message to dance beautifully, capturing listeners’ hearts and minds with every beat.

Embark on a transformative 150-hour journey, guided by the expertise of eminent academicians from IIM Indore, as they engage you in live online sessions, igniting the flames of knowledge and understanding. Take on real-world business difficulties head-on, decipher challenging case studies, and start projects to enhance your problem-solving abilities. Prepare for a learning experience like no other, as interactive simulations push you beyond the ordinary and solidify your expertise in the field of marketing.

This digital marketing course from Imarticus Learning is more than simply a learning experience; it’s a journey into the unknown, where you become not only a master marketer but also a leader in business innovation. Are you prepared to take control of marketing greatness?

Enroll CMO program to start your incredible path toward excellence and growth!

Supply Chain Resilience: Strategies for Mitigating Disruptions

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Supply chains have long remained the lifeblood of companies operating worldwide, and have exponentially grown in complexity over the past years. Also, with the increasing dependence on supply chains as the primary means of production, it has become all the more relevant for companies across the world to reassess the potential disruptions to their individual supply chains that can risk business operations. 

In this regard, Supply Chain Analysts are responsible for exploring possible risks, financial implications and other causative factors behind supply chain disruptions, and ideating ways to improve supply chain resilience against shocks and exposure to risks.

Ways to Mitigate Supply Chain Disruptions

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Supply chain resilience has emerged as a viable solution to mitigate disruptions in the supply chain, and eliminate the company’s exposure to risks. Supply chain management courses frequently highlight the following ways of mitigating shocks and disruptions as viable ways of establishing supply chain resilience.

Multisourcing 

Companies that tend to rely on supply chains originating from singular sources are often at a higher risk of supply chain disruptions. This is because, other than the lack of flexibility, companies can incur unavoidable losses in case of any inconvenience on the part of the supplier.

So, in order to avoid disruptions that could result in unwanted expenses, multisourcing is an effective solution to keep the supply chain uninterrupted. Not only do multiple suppliers offer additional security in times of need, but can result in greater flexibility and diversity. Having multiple suppliers over sole suppliers can also benefit companies operating from several locations.

Inventory and capacity buffers

Inventory and capacity buffers are some of the most prominent precautionary measures for any operating company, and have been recognised as one of the most effective means of establishing Supply Chain Resilience. At a glance, inventory and capacity buffers might appear expensive, but is completely worth their value provided their effectiveness as surge capacity expansions.

Inventory and capacity buffers are also beneficial as a cache for underutilized means of production and excess safety stock requirements, and allow companies to strategically utilise them in times of surge needs, such as product launches or new operating sites. 

Diversification of manufacturing networks

Diversifying manufacturing networks is an excellent way of ensuring Supply Chain Resilience and avoiding disruptions, as it essentially allows companies to widen their accessibilities, while ensuring seamless operation. 

Other than being beneficial to supply flexibility, diversification in manufacturing networks allows companies to improve their image and profitability, stay ahead of competitors, and operate profitably in times of economic crisis. Diversification of the manufacturing networks also means lowered order liability and lead times. Diversifying manufacturing networks has been on the rise in recent years due to its effectiveness in mitigating supply chain disruptions, and the cost of maintaining multiple suppliers has been recognised as the cost of doing business by major companies across the world.

Nearshoring

Geographic dependence on manufacturing networks is a major causative factor contributing to supply chain disruptions. Ranging from differences in timezones and natural disasters to political and strategic unrest, geographic dependence can often cause hindrances to the supply chain, and can also end in additional expenditures and liabilities. 

So, most companies around the globe prefer nearshoring, or sourcing their materials locally or regionally. Nearshoring can help companies overcome their geographic dependence, which benefits companies by improving supply chain resilience, and can simultaneously help shorten the cycle time of production. While nearshoring can be expensive in certain instances such as complications in the ecosystem or involvement of local factors, it offers companies more flexibility and security over inventory, and can significantly reduce supply chain disruptions. 

Ecosystem partnerships

Ecological crises and the need for environmental sustainability have made it crucial for companies to look into means of production that can be carried out effectively without any damage to nature and its values. So, companies have considered new ventures that promote environmental security without compromising their operation. In this regard, adopting ecosystem partnerships have emerged as a promising solution that allows corporations to uphold their environmental integrity, while making sure the supply chain is uninterrupted. 

Adopting eco-friendly measures for inventory acquisition, such as liaisons with global 3PLs and contract manufacturers can help companies achieve their desired goals, and mitigate supply chain disruptions without compromising environmental stability. Collaborating with external service providers also helps in boosting the resilience of future ventures. 

Product, platform and plant harmonisation

Streamlining is an effective way of ensuring supply chain resilience. In this regard, companies are often encouraged to standardise the components of the means of production, including the platform and plant that allows companies to seamlessly move products across networks and efficiently process supply chains. In addition to minimising the risks of supply chain disruptions, harmonising products, platforms and plants is also reflected in end-to-end transparency, improved opportunities and sourcing policies between manufacturing networks, and supply chain resilience.

Conclusion

With supply chains serving as one of the most crucial aspects of business operations in present times, it is vital for companies worldwide to adopt measures that contribute toward strengthening supply chain resilience, while simultaneously optimising production capacities for companies. Improved supply chain management by mitigating disruptions has allowed companies to avoid business risks, respond quickly to potential disruptions and secure assets, as well as improve end-to-end transparency.

Sign up for the Advanced Certification Program from Imarticus to unlock your potential in Supply Chain Management. You might also want to look into other supply chain management courses from Imarticus Learning and begin your journey as a Supply Chain Analyst.

Mastering the Art of Investment Banking: Processes, Planning, Models and Real-World Examples

Posted on by Imarticus Learning

Investment banking offers a captivating career in finance, serving as a vital player in the financial world. With its significant role in facilitating major transactions and offering strategic advice to diverse industries, this field presents rewarding opportunities.

Let us take a look at what is investment banking and the many possibilities awaiting you in the world of investment banking careers.

What is Investment Banking?

Investment banking encompasses extensive financial services primarily centred around raising capital and offering counsel to corporations, governments, and affluent individuals. Engaging in transactions within the capital markets can be intricate, with numerous regulatory challenges to overcome.

Consequently, corporations and various entities frequently enlist the assistance of investment banks to facilitate these processes.

Recognizing what is investment banking and the opportunities it offers to shape successful financial transactions and business strategies through specialized services is important to make a great career in the field of banking.

Investment Banking Functions and Operations

An investment bank is like a middleman between investor and issuer and helps clients raise money through debt and equity offerings.

IPOs (Initial Public Offerings)

  • Companies hire investment banks to issue IPOs and raise capital.
  • Investment banks assist in underwriting, setting offer prices, and creating a market for the stock.

Mergers and Acquisitions (M&A)

  • Investment banks facilitate M&A deals between companies.
  • They play critical roles in valuing companies, strategising the merger process, and raising funds for M&A transactions.

Risk Management

  • Investment banks help manage financial risks like currency, loans, and liquidity.
  • They identify loss areas and control credit risks for effective risk management.

Research

  • Equity research is vital for providing company ratings to aid investor decision-making.
  • Investment banks offer research reports on companies’ performance and market trends.

You can play a vital role in shaping financial markets and supporting businesses through a career in investment banking. Understanding what is investment banking and exploring diverse functions and opportunities to excel in this dynamic field will help you become an efficient Investment Banker.

What is Investment Banking’s Role in the Financial Industry

Investment banking professionals are critical in stock offerings, SEC documentation, M&As, and guiding clients toward lucrative investment opportunities. They ensure smooth execution and handle essential financial and ownership details.

Investment Banking Course

Key Players in Investment Banking

Key players in investment banking include investment banks, corporate clients, institutional investors, retail investors, regulatory authorities, private equity firms, hedge funds, venture capital firms, law firms, and rating agencies. They collaborate to facilitate financial transactions and provide strategic advisory services in the industry.

Core Investment Banking Services

Mergers and Acquisitions (M&A)

M&A, an integral facet of investment banking services, revolves around the convergence of companies through multifaceted transactions encompassing acquisitions, mergers, divestitures, and joint ventures. Investment banks play a pivotal role in guiding clients through these intricate deals.

These financial institutions undertake comprehensive valuation analyses, meticulously identify potential targets or buyers, adeptly negotiate agreements, and astutely oversee the entire process to ensure seamless execution. The realm of Mergers and Acquisitions demands intricate understanding, financial finesse, and astute strategising. Investment bankers leverage their expertise to craft advantageous deals, optimise synergies, and mitigate risks for their clients.

Delving into the intricacies of M&A, investment banks facilitate strategic decisions that reshape industries and redefine business landscapes. By offering insights, market intelligence, and transactional prowess, they empower clients to navigate the complex terrain of M&A with confidence.

Find out more about mergers and acquisitions here.

Capital Markets and Fundraising

In investment banking services, companies receive valuable assistance in raising capital through diverse avenues, such as issuing stocks, bonds, and other financial instruments. Investment banks excel in structuring these offerings, setting optimal pricing, and identifying suitable investors.

Additionally, investment banks play a crucial role in facilitating secondary market transactions, enabling the smooth buying and selling of securities on stock exchanges. To be highly sought after by companies worldwide, understanding what is investment banking specializations like capital markets and fundraising are essential.

Fundraising is crucial for both governments and private companies when they are in need of funds or a stable cash flow for various projects or for future endeavours. Investment bankers are also essential for guiding companies when investing in other companies or external projects.

Financial Modelling

Financial modelling is a core aspect of investment banking services, involving the creation of detailed numerical representations of a company’s financial performance. Investment banks utilise these models to forecast future financial scenarios, analyse investment opportunities, and assess the potential impact of various strategies and decisions.

Financial models encompass a range of elements, including revenue projections, expense forecasts, cash flow analysis, and scenario simulations. Investment banks employ advanced software and tools to build and manipulate these models, allowing them to make informed recommendations to clients.

Financial modelling also helps in simulating business scenarios or probable profit and loss based on different financial decisions or combinations of business decisions.

Find out more about what is investment banking’s role in financial modelling here.

Valuation and Investment Analysis

Within the realm of what is investment banking services, valuation and investment analysis are key components. These practices involve the meticulous assessment of assets, companies, and investment opportunities to determine their intrinsic worth and potential for generating returns.

Investment banks employ various methodologies for valuation, such as discounted cash flow (DCF) analysis, comparable company analysis (comps), precedent transaction analysis, and asset-based valuation. 

By learning what is investment banking valuation methods, investment professionals scrutinise financial data, market trends, and industry benchmarks to arrive at accurate and well-founded valuations.

Analysing investments is essential for businesses and governments to find out if a certain business or financial investment can cause future losses, thus being able to help organisations avoid financial loss or achieve profitability.

Find out more about what is investment banking analysis and valuation methods, such as DCF valuation, here.

Other Essential Investment Banking Services

Corporate Finance and Advisory Services

Investment banks deliver specialised financial counsel to corporations concerning corporate restructuring, capital allocation, financial risk management, and broader financial strategies.

These tailor-made services cater to each client’s unique requirements and frequently entail in-depth financial analysis and extensive market research.

To excel in this field, consider learning what is investment banking and getting trained and certified for comprehensive expertise.

Underwriting and Securities Offerings

Investment banks offer underwriting services for companies launching new securities like stocks or bonds. Underwriting involves selling these securities to investors, with the investment bank bearing the financial risk.

Financial Restructuring and Debt Advisory

Financial restructuring involves a carefully planned strategic overhaul of a company’s capital structure and operations to tackle economic difficulties and avoid bankruptcy.

The main goal is to maximise the efficient utilisation of financial resources and improve the company’s financial health.

This multifaceted process includes various essential components:

  • Debt restructuring
  • Equity infusion
  • Asset sales and divestitures
  • Cost-cutting measures
  • Business reorganisation

What is Investment Banking Process and Transactions

Deal Lifecycle in Investment Banking

Investment bankers begin by identifying potential opportunities and establishing client relationships. Deal origination methods include networking, referrals, market research, and leveraging industry expertise.

Due Diligence and Deal Structuring

After securing the mandate, investment banks conduct comprehensive due diligence on the client’s business, financials, and market position. It aids in structuring the deal appropriately determining suitable financial instruments, pricing, and transaction terms.

Negotiations and Closing Processes

Investment bankers initiate negotiations with potential buyers, sellers, or investors, finding common ground on price and deal specifics. Once a consensus is reached, the deal is executed through legal agreements and contracts.

Post-Deal Integration and Management

After closing the deal, investment bankers may assist with post-merger integration (M&A) or ongoing management of issued financial instruments. Post-deal integration ensures a seamless transition and maximises transaction benefits.

Throughout the deal lifecycle, investment bankers offer clients strategic guidance, financial expertise, and market insights. They collaborate with stakeholders, including legal teams, regulators, and financial institutions, ensuring compliance with relevant laws and regulations.

To understand what is investment banking and gain expertise in its fundamentals, consider enrolling in comprehensive training and banking courses.

Investment Banking in Different Sectors

Investment banking is vital across diverse industries, facilitating crucial financial activities and providing strategic advice.

Here is a brief overview of what is investment banking’s significance in specific sectors:

Investment Banking in Technology and Startups

In this dynamic sector, investment banks support startups and tech companies with capital raising, mergers, acquisitions, and strategic advisory services, empowering innovation and growth.

Investment Banking in Real Estate and Infrastructure

Investment banks enable real estate developers, investors, and infrastructure firms to raise funds, structure deals, and execute transactions for projects, driving progress and development.

Investment Banking in Healthcare and Pharmaceuticals

In the healthcare industry, investment banking aids pharmaceutical, biotech, and medical device companies with IPOs, mergers, licensing deals, and partnerships, fostering advancements in medical research.

Investment Banking in Energy and Utilities

For energy companies, investment banks provide financial services, including project finance, M&A, and capital raising, supporting the growth and expansion of renewable energy initiatives and traditional utility operations, thus contributing to sustainable energy development and meeting global energy demands.

Investment Banking in Consumer Goods and Retail

Investment banks in consumer goods and retail provide financial services, including M&A, IPOs, and strategic advisory, supporting business growth and competitiveness in this sector.

Investment Banking Regulatory Environment

Role of Regulatory Authorities in Investment Banking

Governmental organisations, known as regulatory bodies, uphold the laws and ordinances that apply to investment banks and other financial organisations. They are responsible for encouraging transparency, safeguarding customers and investors, and stopping systemic hazards in the financial system. The SEC in the US and the FCA in the UK are two examples.

Compliance and Legal Considerations

Investment banks must adhere to various regulations covering securities offerings, disclosure requirements, trading practices, anti-money laundering (AML) measures, and data protection.

Dedicated compliance departments within investment banks ensure strict adherence to these regulations and internal policies. Non-compliance may lead to penalties, fines, and damage to the bank’s reputation.

Basel III and Capital Adequacy Requirements

Basel III represents a set of international banking regulations formulated by the Basel Committee on Banking Supervision. It aims to enhance banks’ resilience by strengthening risk management and raising capital adequacy requirements.

These regulations establish minimum capital standards, including shared equity, Tier 1 capital, Tier 1 capital, and total capital, to ensure banks possess sufficient money to withstand financial shocks and maintain stability.

Market Regulations and Risk Management

Being aware of what is investment banking activities that are subject to regulations covering market manipulations, insider trading, and the use of complex financial instruments like derivatives is crucial.

Investment banks must implement robust risk management practices encompassing credit, market, operational, and liquidity risks to ensure compliance.

What is Investment Banking Operations and Back-Office Functions

Trade Settlement and Clearing

Trade settlement and clearing are essential processes in the post-trade phase of financial transactions. After the trade is executed, settlement involves the exchange of cash and securities between the buying and selling parties. Clearing consists of confirming, matching, and validating trade details to ensure accuracy.

Investment banks use clearinghouses and custodian banks to facilitate these processes, which are crucial for reducing counterparty risk and ensuring the timely and accurate completion of trades.

Transaction Confirmation and Reconciliation

Transaction confirmation validates trade details sent to both parties to ensure agreement. Reconciliation compares data from various sources, resolving discrepancies to maintain accuracy and data integrity.

Operations Risk Management

Operations risk management aims to identify, assess, and mitigate risks related to investment banking operations. It includes risks associated with processing errors, technology failures, data breaches, fraud, regulatory compliance, and other operational aspects.

Robust risk management practices are essential to prevent financial losses, reputational damage, and regulatory sanctions.

Trade Support and Middle Office Functions

The middle office in investment banking supports the front-office activities (e.g., traders, sales, etc.) by providing risk management, trade support, and analytics.

Middle office functions may involve monitoring and managing market, credit, and operational risks associated with trading activities. It also handles collateral management, ensuring sufficient collateral for trading activities and mitigating counterparty credit risk.

For a rewarding career in banking, consider getting a comprehensive grasp of what is investment banking by pursuing an investment banking course to gain valuable knowledge and skills essential for this dynamic industry.

What is Investment Banking Technology and Digital Transformation 

Fintech Innovations in Investment Banking

Fintech has revolutionised investment banking with online platforms for capital raising, peer-to-peer lending, and alternative finance solutions. These disruptions provide faster, more efficient, cost-effective financial services, challenging traditional models for investors and businesses.

Automation and Artificial Intelligence (AI) in Operations

Automation and AI technologies have brought remarkable improvements to investment banking operations. Tasks like data entry, trade settlements, and reconciliation have been streamlined with Robotic Process Automation (RPA), leading to faster processing and reduced errors.

AI-powered algorithms assist in trading, portfolio management, and risk assessment, empowering data-driven decision-making.

Blockchain and Distributed Ledger Technology in Investment Banking

The transformative potential of blockchain technology has been recognised in investment banking, particularly in transaction settlement and post-trade operations.

By offering secure and transparent record-keeping through decentralised and immutable ledgers, blockchain minimises the need for intermediaries and enhances trust between parties. It enables faster and more efficient securities settlement while lowering the risk of fraud.

Data Analytics and Machine Learning Applications

Investment banks have embraced data analytics and machine learning to gain deeper insights into market trends, customer behaviour, and risk management. The analysis of big data aids in informed investment decisions, optimising trading strategies, and offering personalised services to clients.

Among other critical applications, machine learning algorithms are instrumental in credit risk assessment, fraud detection, and portfolio optimisation.

Investment Banking Career Paths and Skills

Roles in Investment Banking (Analyst, Associate, VP, Managing Director)

Investment Banking Analyst

Analysts in investment banking are entry-level professionals who conduct financial analysis, build models, prepare pitch materials, and assist with due diligence for transactions. They usually hold bachelor’s degrees in finance, accounting, economics, or related fields.

Investment Banking Associate

Associates are more experienced than analysts and take on additional responsibilities in deal execution and client management. They work closely with senior bankers and often supervise analysts. Associates usually have an MBA or relevant master’s degree and prior experience in finance or investment banking.

Investment Banking Vice President (VP)

Vice Presidents are senior members of the investment banking team who lead deal teams, oversee transaction execution, and play a key role in business development. They are responsible for managing client relationships and providing strategic advice. VPs have significant experience in investment banking or related fields.

Investment Banking Managing Director (MD)

Managing Directors are top-level executives in investment banking responsible for leading and managing the entire division. They focus on business strategy, relationship management with significant clients, and setting overall goals for the division. MDs have extensive experience in investment banking and a successful track record.

Skills and Qualifications for Investment Banking Professionals

Financial acumen: Investment bankers must possess a deep understanding of financial concepts, including financial statement analysis, valuation techniques, and capital markets. They must interpret complex financial data and trends to provide sound financial advice to clients.

Problem-solving: Investment bankers face intricate deals with potential unexpected challenges. Problem-solving skills are essential to navigate complexities, find innovative solutions, and ensure successful deal execution.

Bachelor’s degree in finance or related field: Most investment banking roles require a bachelor’s degree in finance, economics, business, or a related discipline. A solid educational foundation equips professionals with fundamental knowledge in finance and accounting.

Relevant work experience: Many investment banking positions seek candidates with prior experience in finance, investment analysis, or related roles. Internships, finance-related projects, or work in financial institutions can provide valuable exposure and enhance the candidate’s profile.

Licensing or certifications: Certain roles in investment banking may require a licence or certifications. The Chartered Financial Analyst (CFA) certification is also highly regarded in the industry.

Career Development and Advancement

The career progression in investment banking typically follows a well-defined trajectory, starting as an analyst and ascending to higher roles like associate, VP, and ultimately, managing director or senior leadership positions.

This advancement is contingent on exceptional performance, deal execution expertise, successful business development, and strong leadership abilities.

Specialisation opportunities:

Investment banking professionals can specialise in specific sectors like technology, healthcare, or real estate, opening up more prospects within those industries. Becoming a subject matter expert enhances career growth and widens potential opportunities.

What is Investment Banking Trends and Challenges

Emerging Trends in Investment Banking

Digital transformation: Investment banks increasingly embrace digital technologies and automation to streamline operations, enhance client experiences, and improve efficiency. Fintech innovations, artificial intelligence, and blockchain are reshaping various aspects of investment banking processes.

ESG investing: Environmental, Social, and Governance (ESG) considerations have gained prominence in investment decisions. Investors increasingly focus on companies’ sustainability practices, ethical standards, and social impact. Investment banks incorporate ESG factors into their research, valuation models, and client advisory services.

Private capital markets: There is a growing interest in private capital markets, with investors seeking opportunities in venture capital, private equity, and direct investments in private companies. Investment banks are increasingly involved in fundraising and advising in these private markets.

Cross-Border deals: Globalisation has increased cross-border mergers and acquisitions, requiring investment banks to navigate complex regulatory environments and cultural differences to facilitate international transactions.

Challenges and Opportunities in Investment Banking

Adhering to complex regulations: Investment banks grapple with the intricacies of financial regulations, striving to ensure compliance with AML and KYC requirements while upholding ethical practices.

Managing market volatility: The investment banking industry is susceptible to market fluctuations, necessitating effective risk management strategies to safeguard banks and clients from volatility.

Coping with intense competition: Fierce market competition creates fee pressure and narrow profit margins. Banks must distinguish themselves through specialised services, top-tier advisory, and innovative technology.

Impact of Global Economic and Market Conditions

Global economic and market conditions significantly influence investment banking activities. Economic downturns can reduce deal activity, affect capital raising, and increase credit risks. 

Conversely, periods of economic growth can drive M&A transactions and investment opportunities.

Environmental, Social, and Governance (ESG) Considerations

ESG considerations have a profound impact on investment banking. Investors increasingly prioritise sustainable and responsible investments, influencing deal-making and capital allocation decisions. Investment banks incorporate ESG factors into their research, risk assessments, and client recommendations.

Case Studies and Real-World Examples

Successful Investment Banking Transactions

Amazon acquiring Whole Food

In a groundbreaking move, Amazon executed a momentous acquisition of a widespread network of Whole Foods supermarkets, valued at an astounding $13.7 billion. Though the inception of this collaboration encountered certain obstacles, the outcome served as a transformative catalyst for Amazon’s trajectory.

By joining Whole Foods, Amazon significantly expanded its online shopping operations and gained a formidable offline presence. The acquisition opened the doors for Amazon to venture into the fiercely competitive grocery and food industry, giving them a substantial advantage.

Disney and Marvel/Pixar

Disney has showcased its prowess in acquiring other successful companies, cementing its status as an entertainment powerhouse. In a significant deal in 2006, Disney acquired Pixar for an impressive $7.4 billion. This collaboration led to the release of blockbuster hits such as WALL-E and Toy Story 3, generating astounding revenues in the billions.

Building on the success of the Pixar acquisition, Disney repeated the feat by acquiring Marvel Entertainment three years later. The subsequent Marvel films broke records at the box office and brought in billions in revenue.

These acquisitions have proven to be a strategic masterstroke for Disney, solidifying its position as a dominant force in the entertainment industry, with each successful blockbuster further affirming its triumphant approach to growth.

Notable M&A Deals and Capital Market Offerings

Notable M&A Deals

Vodafone and Mannesmann (1999) – $202.8B

In 2000, Vodafone acquired Mannesmann for approximately $203 billion, making it the largest acquisition ever. This deal positioned Vodafone as the world’s largest mobile operator and influenced numerous mega deals in the mobile telecommunications industry.

AT&T and Time Warner (2018) – $108B

In 2018, AT&T’s merger with Time Warner for $108 billion faced antitrust scrutiny, unlike Time Warner’s previous controversial merger with AOL. The AT & T-Time Warner deal was more carefully considered, with AT & T’s more robust financial position.

Notable Capital Market Offerings

Saudi Aramco IPO (December 5th, 2019)

  • Raised $25.6 billion in capital.
  • Current valuation in 2023: $1.93 trillion.
  • Largest IPO of all time.
  • The stock performed well, with close to 10% annual growth.

Alibaba Group IPO (September 19th, 2014)

  • Raised $21.7 billion in capital, with a $167.6 billion valuation.
  • Highly hyped IPO, finishing 38% above initial listing price on the first day.
  • Current valuation in 2023: $272.9 billion.
  • Faced challenges due to political turbulence in China.

What is Investment Banking Best Practices and Lessons Learned

Best Practices

Due diligence: Conducting comprehensive due diligence is crucial before engaging in any transaction. Understanding what is investment banking deal’s financial, legal, and operational aspects helps mitigate risks and uncover potential issues.

Ethical conduct: Upholding high ethical standards is fundamental in investment banking. Transparency, honesty, and fair dealing build trust with clients and foster a positive reputation in the industry.

Market intelligence: Staying informed about what is investment banking market trends, regulatory changes, and economic conditions is vital for offering valuable insights to clients and making informed investment decisions.

Lessons Learned

Timing matters: The timing of a deal can significantly impact its success. Market conditions, economic fluctuations, and geopolitical events can influence the outcome, emphasising the importance of strategic timing.

Client education: Ensuring clients fully understand what is investment banking complexities and risks of investment opportunities, helping them make more informed decisions and reduce misunderstandings later.

Communication is key: Effective communication with clients and internal teams is crucial for managing expectations, aligning strategies, and resolving potential conflicts.

Conclusion

The world of investment banking offers a plethora of opportunities for aspiring professionals. However, excelling in this dynamic field requires a strong foundation of skills and knowledge of what is investment banking. That’s where Imarticus Learning’s Certified Investment Banking Operations Professional course comes into play.

With Imarticus Learning’s comprehensive investment banking certification, aspiring professionals can gain a competitive edge in the industry.

Moreover, the added advantage of Investment banking internships ensures graduates are well-positioned for exciting career opportunities in investment banking.

Whether you are just starting your career or seeking to advance in the field, Imarticus Learning’s investment banking course can be your pathway to success in the fast-paced world of investment banking.

Visit Imarticus Learning today to learn more about certification in investment banking.

Introduction to Capital Markets: Key Concepts and Components

Posted on by Imarticus Learning

The financial market provides convenience and means for sellers and buyers to trade or exchange different modes of financial assets. The money market and the capital market are two types of financial markets. 

The capital market primarily deals with the stock and bond markets and provides long-term financing to governments, businesses, and other entities. Equities and debt securities are sold through the capital market. The money market comprises instruments like treasury bills, certificates of deposits, commercial papers, call money and repo rate. Potential candidates looking to upskill can look up capital market courses several institutes offer to gain in-depth knowledge.

Capital Market Course

This blog is perfect for finance aspirants wanting to learn about the capital market, its types, associated components and their importance in an economy. 

Types of Capital Market

The two types of capital markets are as follows – 

Primary market 

It is a financial system where a company introduces new securities, bonds, stocks or initial public offering (IPO) in exchange for cash. Thus, fresh investment is pumped into the financial market. The fund thus generated helps the company invest in capital assets like land, machinery and other similar aspects required for the company’s expansion. 

Secondary market

This financial system enables buyers and sellers to exchange previously issued securities, bonds, debentures or stocks. The secondary market also aims to raise the fund value so that both sellers and buyers benefit. The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are examples of secondary markets in India. 

Stakeholders of Capital Market

There are two types of stakeholders in the capital market: 

Suppliers of funds 

Suppliers of funds typically consist of banks, insurance houses, and institutions holding public pension or retirement funds. 

Users of funds

Users are private and government institutions financing projects, business houses, manufacturers, and even individuals contemplating home and vehicle purchases. 

Intermediaries of Capital Market

Organisations or individuals who assist in bridging gaps between the surplus and deficit parties are termed financial intermediaries. The different intermediaries of capital markets are as follows – 

  • Brokers – They may be individuals or firms who help parties to buy and sell shares in exchange for commissions. 
  • Stock exchanges – BSE and NSE are the standard Indian stock exchanges where financial transactions occur. 
  • Regulatory body – The Securities Exchange Board of India(SEBI) monitors the capital market in our country. 

Instruments of Capital Market

The instruments of the capital market are as follows – 

Stocks or shares

Companies issue stocks or shares and represent their ownership. The shareholders enjoy quarterly dividends against their purchased shares. The quantum of return on investment depends on the financial performance of companies. 

Stakeholders having equity shares may voice their decision in the annual general meeting of the concerned companies. They are even entitled to get a share of assets in case of liquidation after all debts are cleared. 

Bonds

Bonds are debt securities companies issue to raise funds for growth and expansion. Bond buyers receive interest and the principal amount at the end of the maturity period. 

Currency

Foreign markets use currency as their financial instrument through three types of agreement — spot, outright forward and currency swap.

Derivatives

These are secondary instruments in the capital markets derived from their original counterparts like bonds, shares, currency etc. 

Functions of a Capital Market

There are several essential functions of a capital market, some of which are listed below: 

Capital formation

Capital is created using surplus funds from investors or financial institutions for business houses looking for expansion. Investors choose to use the excess money in this capital market since sitting cash does not reap any benefit. 

Economic growth

The capital market boosts the country’s economic prosperity. Money put into the system fosters business growth by creating fresh demand in the market. A business house may raise cash by offering a portion of its business in the stock market or through debt instruments like bonds.

Liquidity

The capital market system provides cash liquidity to people or institutions at the time of demand. It is a solid assurance to investors.

Price regulation

Monitoring and regulating the price of a financial asset is a primary function of the capital market. Favourable news for a company hikes its stock prices, whereas negative news is perceived as a setback leading to a drop in its share. The system tries to prevent intentional malpractice or foul play that may lead to these changes. 

Features of Capital Market

The various features of the capital market are as follows – 

No entry or exit barriers

Investment opportunities are available to everyone without entry restrictions or exit hindrances. Investors may enter the market whenever they wish and exit as they feel right. It creates a system balance with plenty of buyers and sellers. 

Utilisation of savings

Capital market motivates and helps channelise idle savings to investment, which pays returns and boosts the economy. 

Multiple opportunities for investors

An investor may choose from a bouquet of investment options. High-risk investments are generally associated with higher growth potentials, whereas investments in bonds and securities are safer.    

Source of regular income

The capital market allows individuals to invest in shares and earn dividends, which generate regular income. 

Tax benefit

Investment in stock markets leads to tax benefits at times. 

Wealth creation

Investment is aimed solely at wealth creation as performed by the capital market. It also helps in long-term investment. 

Retirement benefits

Pension or superannuation funds are a product of the capital market. 

Conclusion

With our country growing as one of the fastest global economies, the capital market has gained tremendous momentum. Extensive knowledge in the field can help exploit the growing employment opportunities in the sector. Enrolling in a capital market course can be the best step towards that goal. 

The Advanced Management Programme in Financial Services and Capital Markets by Imarticus offers candidates an interactive learning environment with renowned faculty helming the course. This IIM Lucknow finance course spans 11 months. It provides a 5-day campus immersion allowing students to attend on-campus classes, master classes from industry experts, and capstone projects on an industry-relevant curriculum. 

Visit the official website of Imarticus for more course-related details. 

Capital Asset Pricing Model (CAPM)

Posted on by Imarticus Learning

Data or numbers are quite important for a company, whether to project revenue or estimate costs. Thus to ensure success, any company needs to analyse its numbers properly. Financial modelling is one tool that helps represent a company’s data, past, present and even predicted future. It is used for accurate decision-making. Executives can use this tool for cost and profit estimation of any new project.

One popular financial modelling tool is CAPM or Capital Asset Pricing Model, often used in corporate finance. It helps to understand the relationship between market fluctuations and the risk posed by an asset or security, like a stock. 

Financial Analyst Course

The projected employment growth for financial analysts is 9% between 2021 to 2031, thus making it an ideal career choice. If you want to become a financial analyst, then this is the correct time to take up a financial analysis course. Gain a basic understanding of a few financial models before embarking on a journey to become a financial analyst.

This article examines the CAPM model, its components, working, benefits, drawbacks and so on.

Capital Asset Pricing Model: What Is It?

Every investment comes with a risk and a return. The Capital Asset Pricing Model helps to understand this very relationship between investment risks and expected returns. It helps estimate the probable investment returns and determine the security or stock prices.

CAPM assessment demands a thorough understanding of unsystematic and systematic risks. The model was designed in the early 1960s primarily to estimate systematic risk, a risk which an institution can not avoid. For instance, risks related to inflation, recession, exchange rate, interest rate, etc. 

However, unsystematic risks are those related to investments in specific equities or stocks and are thus not regarded as huge threats. These risks are shareable in the general market. Thus, CAPM helps forecast the success or failure of investment by analysing the systematic risks.

CAPM Assumptions

Here are the assumptions of the CAPM Model:

  • A diversified portfolio managed by investors
  • Investors will lend and borrow at a risk-free return rate.
  • A perfect capital market where every security is valued correctly.

CAPM Formula

Here is the formula for the Capital Asset Pricing Model assessment:

Ra = Rf + Be x (Rm – Rf)

Where,

  • Ra denotes the expected rate of return
  • Rf denotes the risk-free return rate
  • Be is the beta factor of the transaction
  • Rm – Rf denotes the market risk premium

What Are the Various CAPM Components?

Read this section to find out more about each CAPM component. 

Expected rate of return

The expected rate of return is the amount the investor will fetch from investing in an asset. It is based on multiple factors like beta, market risk premium, etc. It’s a long-term presumption about how any investment can roll over in its lifetime.

Risk-free return rate

A risk-free return rate denotes money’s value over time. It is measurable in terms of the yield generated by a 10-year-old government bond of the United States. U.S.-based securities are usually taken as a baseline for this component since it’s highly improbable that the U.S. government would default on payment. Thus, no payment default is synonymous with minimal risks for the investors.

Beta 

Beta measures the volatility of any stock, equity, investment, or asset. It provides an idea about a stock’s risk by analysing its price fluctuation concerning the overall investment market. In other words, the beta factor shows an asset’s sensitivity towards market fluctuations.

Sensitive stocks have incredibly high beta and are thus volatile, while a more stable asset will have low beta and will be less volatile. Measured in number, 1 is the benchmark. Any stock having a beta less than 1 is more stable than market fluctuations and is thus less volatile.

Assets with a beta of more than 1 are less stable than market fluctuations and more volatile. Stocks with negative beta values have an inverse relationship with fluctuations in the market.

Market risk premium

A market risk premium is the investor’s reward for taking a riskier investment rather than opting for a low or zero-risk one. Assets, stocks, or investments with more significant risks have a higher market risk premium than the ones with lesser risks.

CAPM Calculation Example

Here’s an example to understand CAPM calculation better.

Let’s assume that an investor plans to invest in an equity valued at ₹100 per share today. It generates an annual dividend of 3%. Let us further assume that the beta here is 1.3, and 3% is the risk-free rate. We also assume that the investor predicts the market value to soar at 8% per year. 

Thus, the expected rate of return = 3% + 1.3 × (8%−3%) = 9.5%

What Are the Advantages of Using CAPM?

The advantages of using CAPM are as follows:

  • Easy to use because of the simple formula. 
  • Eliminates the assumption of unsystematic risks and only considers systematic risks. It indicates the reality since most investors keep a diversified portfolio.
  • The relationship between return and market risks has been derived theoretically after testing and empirical research. 

What Are the Shortcomings of CAPM?

There’s hardly a doubt that CAPM is a highly effective model. However, this effectivity is also paired with the following drawbacks:

  • The risk-free return rate can fluctuate in a few days, while the model considers short-term securities. This is a crucial flaw.
  • Beta determination can be time-consuming and challenging at times. 
  • The unrealistic assumption is that the investors can lend or borrow at the same rate as the government. 

Conclusion

Finance professionals must have a thorough understanding of financial modelling tools to help them examine the various financial aspects of an organisation. Enrol in a financial analysis course to upskill and launch a successful career as an investment banker or financial analyst. 

The Financial Analysis Prodegree offered by Imarticus in collaboration with KPMG is a 4-month course focused on helping learners secure a career in financial analysis, investment banking, corporate finance, and various other financial sector. Delivered by industry practitioners, the course offers 360-degree learning with industry certifications.

Explore Imarticus Learning to learn more.

Critical Infrastructure Security and Disaster Recovery (Business Continuity Planning)

Posted on by Imarticus Learning

In today’s digital age, the security of critical infrastructure is of paramount importance. Organisations must be prepared to safeguard their systems and networks from potential cyber threats. Alongside security measures, having a robust disaster recovery plan is essential for ensuring business continuity.

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This article explores the significance of critical infrastructure security and disaster recovery, highlighting the importance of cybersecurity course and ethical hacking in maintaining a secure environment. With the speedy digitization of critical infrastructure, the risks associated with cyber threats have increased significantly. Cybercriminals mark indispensable services such as power grids, conveyance systems, and healthcare facilities to disrupt operations, cause financial loss, and compromise public refuge. To protect these life-sustaining systems, organisations must borrow proactive protection measures and develop comprehensive disaster retrieval plans.

Understanding Critical Infrastructure

A nation’s or a system’s indispensable resources, systems, and networks are referred to as very decisive infrastructure. Energy, conveyance, water, telecommunications, and healthcare are just a few of the industries that are included. These systems’ disturbance or loss can experience serious repercussions, impacting not only the system but also the common public.

The Need for Security Measures

Given the interconnectedness of vital infrastructure, securing these systems is important. Cybersecurity measures help in detecting, preventing, and responding to potential threat threats, ensuring the confidentiality, wholeness, and availability of critical information. Robust security measures include firewalls, intrusion detection systems, encryption, approach controls, and regular certificate audits.

Challenges in Critical Infrastructure Security

Protecting critical substructures poses several challenges. Firstly, these systems often consist of legacy components that may not have been designed with modern certificate considerations in mind. Additionally, the interconnected nature of the vital base makes it vulnerable to cascading failures, where a single breach can have widespread consequences. Moreover, the evolving landscape of cyber threats requires constant monitoring and adjustment of security measures.

Role of Cybersecurity Courses

To address the increasing complexities of cyber threats, organisations should invest in a cybersecurity course. These courses provide professionals with the knowledge and skills necessary to discover vulnerabilities, mitigate risks, and respond effectively to cyber incidents. By equipping individuals with up-to-date knowledge of cybersecurity best practices, organisations can heighten their boilersuit security posture.

Ethical Hacking in Critical Infrastructure Security

Ethical hacking, also known as insight testing, plays a life-sustaining role in critical substructure protection. Ethical hackers feign real-world cyber attacks to key vulnerabilities and weaknesses in systems and networks. By conducting ethical hacking exercises, organisations can proactively identify and address potential security gaps before malicious actors tap them. The primary goal of ethical hacking is to mimic the techniques and methodologies utilised by malicious actors in a sweat to display vulnerabilities before they can be ill-used. Ethical hackers leverage a change of tools, techniques, and methodologies to test the robustness of an organisation’s certificate measures. They employ a systematic approach to identify weaknesses in networks, applications, and systems, which could potentially provide wildcat access or compromise the integrity and confidentiality of critical data.

Disaster Recovery and Business Continuity Planning

Disaster recovery and business continuity planning are crucial components of critical infrastructure security. These plans outline procedures and strategies to ensure the swift recovery of systems and minimise downtime in the event of a cyber attack or natural disaster. They involve regular data backups, redundant systems, alternate communication channels, and predefined roles and responsibilities.

Importance of Regular Testing and Updates

Regular testing and updates are essential for maintaining the effectiveness of security measures and disaster recovery plans. Organisations should conduct periodic vulnerability assessments, penetration testing, and simulations of various scenarios to identify potential weaknesses. Additionally, staying up-to-date with the latest security patches, software updates, and threat intelligence helps mitigate emerging risks.

Collaborative Efforts in Security and Recovery

Given the interrelated nature of critical infrastructure, collaboration among different stakeholders is essential. Public and very private sphere organisations, government agencies, cybersecurity experts, and industry associations should cooperate to portion information, best practices, and threat intelligence. Collaborative efforts heighten the collective resilience of critical infrastructure and enable timely response to certificate incidents. One key facet of coaction is the sharing of info, topper practices, and threat intelligence. By establishing channels for communication and knowledge exchange, organisations can benefit from the collective sapience and experiences of others. This sharing of information enables stakeholders to rest updated on emerging threats, evolving attack techniques, and effective protection measures.

Ensuring Compliance and Regulatory Standards

Adhering to compliance and regulatory standards is indispensable for maintaining the security and resilience of vital bases. Organisations must follow industry-specific regulations and frameworks such as NIST Cybersecurity Framework, ISO 27001, and GDPR. Compliance ensures that appropriate security controls are in place and helps organisations march their consignment to safeguarding decisive systems.

Case Studies: Successful Security and Recovery Measures

Examining real-world case studies of successful security and recovery measures provides valuable insights for organisations. By analysing past incidents and the corresponding response strategies, organisations can learn from best practices and adapt them to their environments. Case studies highlight the importance of proactive security measures, effective incident response, and continuous improvement.

The Future of Critical Infrastructure Security

As technology advances and cyber threats evolve, the future of vital base surety testament requires invariable adaptation. Emerging technologies such as unreal intelligence, machine learning, and blockchain contain the potential to enhance certificate measures and enable proactive threat especially. Organisations must stay abreast of these developments and invest in innovative security solutions.

Conclusion

In conclusion, ensuring the security and resilience of critical infrastructure is paramount in today’s digital landscape. Cybersecurity courses and ethical hacking play crucial roles in equipping organisations with the necessary knowledge and skills to protect their systems from evolving threats. Implementing robust security measures, developing comprehensive disaster recovery plans, and fostering collaborative efforts will help mitigate risks and ensure the continuity of critical services.

If you’re interested in pursuing a career in ethical hacking and cybersecurity, consider enrolling in Imarticus Learning’s Post Graduate Program in Cybersecurity to gain the skills and knowledge needed to succeed in this exciting field.

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